TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Thursday, October 1, 2015

Federal Tax Law And Issues Related To The Commonwealth Of Puerto Rico

Senate LogoThe Senate Finance Committee held a hearing yesterday on Financial and Economic Challenges in Puerto Rico.  In connection with the hearing, the Joint Committee on Taxation released Federal Tax Law And Issues Related To The Commonwealth Of Puerto Rico (JCX-132-15):

This document ... provides an overview and analysis of Federal tax laws relating to the Commonwealth of Puerto Rico and other U.S. territories, summarizes recent prominent changes in Puerto Rican tax law, and describes the economy of Puerto Rico, in part by comparison to economic measures for the United States as a whole. ...

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October 1, 2015 in Congressional News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 875

IRS Logo 2Forbes:  More IRS Bonuses Revealed By Lawsuit, by Robert W. Wood:

Many Americans probably think the IRS shouldn’t be handing out bonuses. Not to Lois Lerner or a fired IRS Commissioner anyhow. But they did, and a lawsuit by Tax Analysts tried to get to the bottom of these and other IRS bonuses. Why a lawsuit?

Because the IRS stonewalled, as it not infrequently does. Tax Analysts asked nicely first and made a Freedom of Information Act request. But the IRS has high walls. Eventually, Tax Analysts brought a suit against the IRS to compel the agency to release records of bonuses to high-level executives since 2010.

Many of the bonuses can be traced to IRS Commissioner Koskinen, who took the helm of the IRS in December 2013. Most of the IRS bonuses were paid in February and March 2014, with 238 awards totaling $976,387. No further awards were recorded until November and January 2015, with 218 awards totaling $1,000,108.

In all, the IRS paid 1,269 performance awards and retention incentives to 351 chief counsel executive and nonunion managers. These amounts totaled $5.97 million between January 1, 2010, and February 2, 2015. The average performance award was $4,483. Yet individual awards ranged from $88 to $44,096. Individual recipients’ total awards ranged even more widely, from $250 to $285,688. For considerable detail on the bonuses, go here.

As you read about bonuses, you might recall other reports saying that 61% of IRS employees caught willfully violating the tax law aren’t fired, but may get promoted. You might find it even worse that Ms. Lois Lerner received $129,000 in bonuses. The former IRS official received $129,300 in bonuses between 2010 and 2013. As head of the IRS tax-exempt division at the heart of the targeting scandal, she received a 25% retention bonus each year—averaging $43,000 a year—on top of her regular salary.The IRS scandal broke in May 2013, but goes back to January 2010. The Supreme Court in Citizens United found it unconstitutional to ban free speech by corporations, unions and other organizations. Shortly thereafter, the IRS distributed a BOLO (Be on the Lookout) list for Tea Party organizations applying for tax exempt status. As the emails went awry, the fact that the IRS used instant messaging to hide internal communications was pooh-poohed by the administration.

Recently, the IRS says it “discovered” that Lois Lerner’s dog had an email account, in addition to her official account and personal email accounts. There was already an official IRS email account, and Lerner’s own private email account that the IRS had labeled ‘Lois Home.’ The ‘Toby Miles’ account? Toby is the dog, and Michael Miles is Ms. Lerner’s husband.

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October 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, September 30, 2015

2015 International Tax Competitiveness Ranking: U.S. Is 32 Out Of 34 OECD Countries

TFWall Street Journal editorial, American Tax Exceptionalism: The U.S. Again Ranks Near the Bottom on Corporate Competitiveness:

Another year of slow economic growth, and another year of zero progress reforming the U.S. tax system. This week the Tax Foundation will release its annual International Tax Competitiveness Index and once again the U.S. ranks a dismal 32nd out of 34 industrialized nations. ...

The index measures various factors that determine how friendly a government is to business and investment, including the amount of taxation and the complexity of tax rules. While Washington gets credit for refraining from a value-added tax on top of its other levies, the U.S. comes in dead last among the 34 developed countries in the Organization for Economic Cooperation and Development (OECD) when it comes to taxing corporate income.

Tax Foundation, 2015 International Tax Competitiveness Index:


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September 30, 2015 in Tax, Think Tank Reports | Permalink | Comments (3)

Zucman: Hidden Wealth Of Nations — The Scourge Of Tax Havens

Zucman CoverGabriel Zucman (UC-Berkeley), Hidden Wealth of Nations: The Scourge of Tax Havens (University of Chicago Press, Sept. 22, 2015):

We are well aware of the rise of the 1% as the rapid growth of economic inequality has put the majority of the world’s wealth in the pockets of fewer and fewer. One much-discussed solution to this imbalance is to significantly increase the rate at which we tax the wealthy. But with an enormous amount of the world’s wealth hidden in tax havens—in countries like Switzerland, Luxembourg, and the Cayman Islands—this wealth cannot be fully accounted for and taxed fairly. No one, from economists to bankers to politicians, has been able to quantify exactly how much of the world’s assets are currently hidden—until now. Gabriel Zucman is the first economist to offer reliable insight into the actual extent of the world’s money held in tax havens. And it’s staggering.

In The Hidden Wealth of Nations, Zucman offers an inventive and sophisticated approach to quantifying how big the problem is, how tax havens work and are organized, and how we can begin to approach a solution. His research reveals that tax havens are a quickly growing danger to the world economy. In the past five years, the amount of wealth in tax havens has increased over 25%—there has never been as much money held offshore as there is today. This hidden wealth accounts for at least $7.6 trillion, equivalent to 8% of the global financial assets of households.

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September 30, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Feld: The Political Economy Of Tax Indexing For Inflation

Alan Feld (Boston University), Silent Tax Changes: The Political Economy of Indexing for Inflation:

The federal income tax adjusts many but not all of its dollar components automatically to account for inflation. In this article I analyze the benefits and burdens this process confers on some taxpayers and the political logic behind them. I discuss the choice of the proper index for making the adjustments, as well as the effects of the failure to adjust specific dollar amounts. I conclude that some adjustments have become overly generous, while unadjusted provisions suffer slow repeal, sometimes intentionally. Indexation thus can have the effect of tax legislation by stealth.

September 30, 2015 in Scholarship, Tax | Permalink | Comments (1)

Motro: How To Write A Law Article That Reads Like A Good Story

Journal of Legal Education (2014)Shari Motro (Richmond), The Three-Act Argument: How to Write a Law Article That Reads Like a Good Story, 64 J. Legal Educ. 707 (2015):

Why do many law articles — my own included — leave readers cold? One reason may be that they lack fundamental elements that make up a good story. They lack tension. They lack narrative arc. Over my years teaching seminars and exchanging drafts with colleagues, I’ve developed a recipe inspired by dramatic plot that helps me organize ideas into a form that better engages the reader. I’ve also found it to be conducive to a richer, more generative, more joyful writing process. I hope it does the same for you!

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September 30, 2015 in Legal Education, Scholarship | Permalink | Comments (1)

Men Cite Their Own Work More Than Women

Inside Higher Ed, Men Who Admire Their Own Work:

Numerous studies have found that men are more likely to think highly of themselves and their talents than are women when they evaluate themselves.

A new study finds that these patterns extend to self-citation, in which scholars cite their own past work in new studies.  Some scholars frown on the practice, while others note that there may be circumstances where such citations are necessary. But whether one has permissive or skeptical attitudes about self-citation, shouldn't the patterns be the same for men and women?

The study -- released Monday at the annual meeting of the American Sociological Association -- found that 31 percent of men engage in self-citation, compared to only 21 percent of women.  [Molly King (Stanford), Shelley Correll (Stanford), Jennifer Jacquet (NYU), Carl Bergstrom (Washington) & Jevin West (Washington), Men Set Their Own Cites High: Gender and Self-Citation Across Fields and Over Time]


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September 30, 2015 in Legal Education, Scholarship | Permalink | Comments (1)

Fleischer: Trump Tax Plan A Triumph Of Showmanship Over Common Sense

Trump 3

Following up on Monday's post, Trump's Tax Plan: 'Tax Reform That Will Make America Great Again':  New York Times Deal Book:  Trump Tax Plan a Triumph of Showmanship Over Common Sense, by Victor Fleischer (San Diego):

A mercurial candidate needs a mercurial tax plan. Donald J. Trump’s proposal to overhaul the tax code fits the bill. But it would hardly raise the revenue needed to pay the nation’s invoices.

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September 30, 2015 in Political News, Tax | Permalink | Comments (0)

The DOJ's Office of Legal Counsel: Breeding Ground For 67 Law Professors

Yale Journal on Regulation Blog:  The DOJ OLC College of Law, by Chris Walker (Ohio State):

On the administrative law professor email listserv, my colleague Peter Shane sparked an intriguing discussion about the impact of the Justice Department’s Office of Legal Counsel (OLC) on administrative law scholarship and the legal academy more generally. ...

I’ve reproduced below that working list of 67 ... OLC alums who have since spent time as law professors. ... Is there another institution that has produced anywhere near as many law professors?  

September 30, 2015 in Legal Education | Permalink | Comments (6)

Bank: Shifty Moves — Sepp Blatter, Neymar, Google Flout Tax Rules

Steven Bank (UCLA), Shifty Moves: Sepp Blatter, Neymar, Google Flout Rules:

This past Friday, in what has unfortunately been an increasingly common phenomenon in the world of soccer, there were more highlights off the field than on it. The biggest news: The Swiss Attorney General’s Office formally announced that longtime FIFA president Sepp Blatter was under criminal investigation for his part in the FIFA corruption scandal. Prosecutors subjected Blatter to several hours of interrogation while conducting a search of his offices at the organization’s headquarters in Zurich.

Meanwhile, half a world away in Sao Paulo, a federal judge froze nearly $50 million of FC Barcelona star Neymar’s assets, declaring that Neymar had allegedly evaded as much as $16 million in taxes between 2011 and 2013 in connection with his 2013 transfer from the Brazilian club Santos to FC Barcelona. The allegations are similar to those levied against Lionel Messi in Spain, where a court recently ruled that there was sufficient evidence to permit the criminal prosecution of Messi and his father for tax fraud schemes designed to evade as much as $5.5 million in taxes. Fellow Barcelona star Javier Mascherano was also charged on Monday for avoiding taxes in Spain.

So what do these events have in common? Profit-shifting. ... So what [do profit-shifting by Blatter, Neymar, and Messi] have to do with Google (and Apple, and Microsoft, and Facebook, and countless other companies)? These profit-shifting transactions have in recent years become the bread and butter of multinational corporations, primarily to avoid high-tax jurisdictions, but sometimes to hide profits from investors or disguise illicit payments. ...

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September 30, 2015 in Tax | Permalink | Comments (0)

Graetz: Can A 20th Century Business Income Tax Serve A 21st Century Economy?

Michael J. Graetz (Columbia),  Can a 20th Century Business Income Tax Regime Serve a 21st Century Economy?, 30 Australian Tax Forum 551 (2015):

This article is the text of the Parsons Lecture given by Michael Graetz at the University of Sydney Law School in April 2015. In it the author reviews the contemporary challenges involved in making international tax policy. These challenges include the tensions of international tax competition whilst balancing both sound economic theory, and politics. The author explains how the 20th Century international tax system that we have is poorly equipped to cope with the 21st Century’s technologically impelled, integrated global economy.

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September 30, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 874

IRS Logo 2Forbes:  Forget Lois Lerner, These IRS Agents Behaved REALLY Badly, by Robert W. Wood:

In any big organization, there are going to be mistakes, over-reaching, even some bad apples. As the media still debates how bad Lois Lerner was in the IRS targeting–while she received $129,000 in bonuses–there are other examples of bad IRS conduct. Alleged conduct anyway. For example, one IRS Agent in Seattle is facing criminal charges over an alleged scheme to extort cash from a medical marijuana dispensary for audit favors.

The Seattle Times reported that an IRS Agent named Paul Hurley, 42, attempted to squeeze tens of thousands of dollars out of a businessman for help with a delinquent tax bill. The IRS takes cases of misconduct seriously, for obvious reasons. Meanwhile, an IRS Agent in Tennessee has been charged with sexually assaulting a woman while performing an audit. Agent Samuel Garza was charged with sexual battery.

No matter how you spin it, these are further embarrassments for an agency that is still not over allegations of targeting and more. Even so, these alleged crimes may not be as colorful as the sex for lower taxes story spun by Vincent Burroughs. Vincent Burroughs claimed that his IRS auditor, Ms. Dora Abrahamson, flirted with him by phone and text, then sent him a selfie in her underwear.

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September 30, 2015 in IRS News, IRS Scandal | Permalink | Comments (0)

Tuesday, September 29, 2015

Sanchirico Presents Tax Inertia And Business Tax Reform Today At Columbia

SanchiricoChris William Sanchirico (Pennsylvania) presents  Tax Inertia: A General Framework with Specific Application to Business Tax Reform at Columbia today as part of its Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

A surprising degree of bipartisan consensus has lately formed in the United States around two propositions of business tax reform: that something should be done about the “lockout” of US multinationals’ foreign earnings; and that the corporate income tax rate should be reduced. This paper questions whether these two propositions are really consistent.

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September 29, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Ryznar Presents An Easy Solution To The Marriage Penalty Today At Indiana-Indianapolis

RyznarMargaret Ryznar (Indiana-Indianapolis) presents An Easy Solution to the Marriage Penalty at Indiana-Indianapolis today as part of its Faculty Colloquium Series:

The marriage penalty in the federal income tax continues to persist despite universal agreement that there is no place for it. This Article is modest yet revolutionary in its proposal to eliminate the marriage penalty: to create another tax filing status for two-income earning couples that earn an amount within a particular percentage of each other. This filing status would offer double the rates of single filers because it accommodates two incomes. Such a simple solution to the marriage penalty causes the least upheaval to the general legal framework that treats spouses as a single economic unit. It has the additional attributes of finally no longer penalizing a significant subset of women who work and marry. 

September 29, 2015 | Permalink | Comments (1)

Muller: The MBE Was Not 'Harder' Than Usual This Year

NCBEDerek Muller (Pepperdine), No, the MBA Was Not "Harder" Than Usual:

I frequently read comments, on this site and others, commenting that the bar exam was simply harder than usual. Specifically, I read many people, often law faculty (who didn't take the exam this year) or recent graduates (the vast majority of whom are taking the bar exam for the first time), insisting that the bar, especially the Multistate Bar Exam ("MBE") is "harder" than before.

Let's set aside, for now, and briefly, (1) rampant speculation, (2) cognitive biases suggesting that the instance in which someone is taking a multiple choice test that counts for something feels "harder" than ungraded practice, (3) erroneous comparisons between the MBE and bar prep companies, (4) retroactive fitting of negative bar results with negative bar experiences, or (5) the use of comparatives in the absence of a comparison.

Let's instead focus on whether the July 2015 bar exam was "harder" than usual. The answer is, in all likelihood, no--at least, almost assuredly, not in the way most are suggesting, i.e., that the MBE was harder in such a way that it resulted in lower bar passage rates. ...

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September 29, 2015 in Legal Education | Permalink | Comments (1)

WSJ: Crunchtime For Global Tax-Avoidance Push

Wall Street Journal, Crunchtime for Global Tax-Avoidance Push:

Nearly 50 governments are set to agree this fall to a new set of rules to clamp down on tax avoidance among multinational corporations. Their chance of success, however, is unclear.

If the rules work as planned, they will help ensure big companies pay tax on profits where they are earned, boosting revenues for governments, particularly in larger countries. Advocates say the stricter rules will make for fairer competition between small and large companies, since the latter gain an advantage by being better able to avoid tax.

Far less certain is how widely the new rules will be applied, and whether they will boost government revenues after all. Also unclear is whether the U.S. will overcome opposition in Congress, where critics question the Treasury Department’s right to implement international rules not reflected in U.S. legislation.

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September 29, 2015 in Tax | Permalink | Comments (0)

Yahoo To Pursue Alibaba Spinoff Without IRS Ruling

Hawaii Seeks To Hire Entry Level Or Lateral Tax Prof

Hawaii LogoThe University of Hawaii Law School is seeking to hire an entry level or lateral professor from among a variety of subject areas, including tax:

The University of Hawai'i is seeking an assistant, associate, or full professor for a tenure-track position. Term will begin August 1, 2016, or when the selected candidate is available. We encourage applications from persons interested in teaching, with particular attention to intellectual property, criminal law and procedure, trusts and estates, and tax areas.

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September 29, 2015 in Tax, Tax Prof Jobs | Permalink | Comments (0)

Enrollment Plummets At Northeast Ohio Law Schools: Akron (-16%), Case (-36%), Cleveland (-39%)

Crain's Cleveland Business, Enrollment Is Falling at Northeast Ohio Law Schools:

Northeast Ohio’s law schools continue to see enrollments dwindle compared with the levels seen just a few years ago, but school officials and industry experts are hopeful the trend may soon turn around.

The consensus is the overall situation, here and nationwide, is worrisome, but not dire — yet.

Data from the University of Akron School of Law, Cleveland-Marshall College of Law and Case Western Reserve University School of Law show that enrollments at those schools are down 3% to 6% from last year. More striking, though, are the decreases over the last several years.

Since 2010, total enrollment has dropped about 36% and 39% at Case Western Reserve and Cleveland-Marshall, respectively, and 16% at Akron. ...

Here are this fall’s total and first-year enrollment figures for J.D. programs:

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September 29, 2015 in Legal Education | Permalink | Comments (14)

Tax Profs Oppose Territorial Tax System, Offshore Profits Tax Relief

AFTFNews Release:

In an 11-page letter to Members of Congress, 24 international tax experts raise significant concerns about legislative proposals that would seek to close a six-year funding shortfall in the Highway Trust Fund by taxing $2.1 trillion in U.S. corporate offshore profits at a significant discount that would overhaul the way U.S. corporations would be taxed on their future offshore profits.

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September 29, 2015 in Tax | Permalink | Comments (2)

NLJ: Law School Special Report

NLJNational Law Journal, Law Schools Special Report: Staying Sane, Before and After Graduation:

This week, we present a "how-to" for students and for lawyers starting their careers. Amid a tight job market and the high cost of legal education, entering the profession is not a decision to make lightly. But success, as you'll read, is not just about getting good grades and nailing the interview. It's about finding balance, enjoying the learning process and setting in motion a career that will cultivate a sense of purpose and professional fulfillment. It really is possible.

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September 29, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 873

IRS Logo 2Conservative HQ, Lois Lerner's 'Partners' and Her ‘Mini-Me’:

Conservatives who now know about the lawless, arrogant ex-federal bureaucrat lawyer Lois Lerner may wish to know that her “farm team” meets at the Washington Marriott Georgetown October 5 – 7.

Last week I wrote at American Thinker about the little-known organization called NASCO, the National Association of State Charity Officials. NASCO consists of government bureaucrats who, like Lois Lerner, are supposed to be nonpartisan, but frequently are statist partisans who abuse government power. They operate between conservatives and the causes they support, and too many show contempt for -- even ignorance of -- constitutional rights and the rule of law over them.  ...

Professor Paul Caron, who deserves a medal for his daily spot about The IRS Scandal at his TaxProf Blog, focused on an observation about the bullying methods used by some members of NASCO. I’ll expand a bit with more from the American Thinker piece:

It’s not just that NASCO considered itself a partner with “Dr. Evil” Lois Lerner so much as many of its members act like her “Mini-Me.” Lerner’s IRS was caught violating First Amendment rights of conservatives by demanding such things as the prayers they said at their meetings, and illegally disclosing to hostile blogs the confidential list of donors to the National Organization of Marriage. 

It is a common unethical practice employed by many NASCO members to, like Lerner, make demands for actions and production of documents, but refusing to cite legal authority, which gives cover to their lawlessness or even incompetence.  For example, one assistant attorney general sent a “civil investigative demand” for documents. The investigation statute required that she state her “cause” in her demand, which provides a modicum of Fourth Amendment protection. When I asked her to cite her “cause,” she cited to the law requiring her to state her cause. I wrote back suggesting she watch a few episodes of Law & Order to learn the law. 

Minnesota Assistant Attorney General Elizabeth Kremenak provides another good example. Charity regulators have authority to investigate misdeeds, of course, but not authority to violate the First or Fourth Amendments. Not only does Kremenak tell charities what to do and what documents to produce, she adamantly refuses even when asked to provide notice of her legal authority for making such demands. Her lack of transparency is unethically designed to shield her violations of First and Fourth Amendment rights, and even her own investigations statute. 

Kremenak reports to Minnesota Attorney General Lori Swanson. After reaching a settlement in 2008 with a bank, which directed that a third of a six-figure fine go to the corrupt and now defunct “community organizing” group ACORN, Swanson received a grade of A+ from that group in time for her 2010 election. So, it’s not just censorship of political enemies; these regulators use their positions for payola and cronyism. 

Conservatives who have had dealings with Lois Lerner over the years, from when she was at the Federal Election Commission to her time at the IRS, need to know that there are hoards of NASCO bureaucrats such as Kremenak who act like Lerner’s ‘Mini-Me.’  

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September 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, September 28, 2015

Osofsky Presents The Case For Categorical Nonenforcement Today At Northwestern

Osofsky (2016)Leigh Osofsky (Miami) presents The Case for Categorical Nonenforcement, 69 Tax L. Rev. ___ (2015), at Northwestern today as part of its Tax Colloquium Series:

Executive nonenforcement of the law is a hot-button issue. An important question that has surfaced in the debate about such nonenforcement is whether categorical, or complete, prospective nonenforcement of the law is legitimate. A variety of scholars and commentators have suggested that it is not. This Article contests such claims by applying theories of agency legitimacy to the realities of IRS nonenforcement of the tax law. Doing so reveals that, in some circumstances, categorical nonenforcement may actually increase the legitimacy of the IRS’s nonenforcement.

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September 28, 2015 in Colloquia, Structuring a Tax Workshop Series, Tax | Permalink | Comments (1)

Tazhitdinovaat Presents The Effect Of Firm Incentives On Labor Supply Responses To Taxes Today At UC-Berkeley

TazhitdinovaatAlisa Tazhitdinovaat (UC-Berkeley) presents Adjust Me if I Can't. The Effect of Firm Incentives on Labor Supply Responses to Taxes at UC-Berkeley today as part of its Robert D. Burch Center for Tax Policy and Public Finance Seminar:

Using administrative data, I show evidence of strong behavioral responses -- in the form of sharp bunching -- to a threshold that generates large discontinuous changes both in the marginal tax rates and in the total income and payroll tax liability of individuals in Germany. To calculate elasticities of earnings with respect to net-of-tax rate I extend the bunching method to frameworks with large kinks and notches. Sharp bunching translates into elasticity estimates that are an order of magnitude larger than has been previously estimated using the bunching approach. Elasticity point estimates range from 0.20 to 0.37 for women and from 0.09 to 0.25 for men, depending on the year. To explain the magnitude of the observed response, I focus on firm incentives. I show theoretically that in the presence of search costs, the magnitude of labor supply responses to taxes depends not only on the magnitude of tax changes, but also on the statutory incidence of taxes, the elasticity of substitution between the individuals working under different tax regimes and on the incidence of job search burden.

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September 28, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Mehrotra & Thorndike Present New Deal Legislation & 20th Century Progressive Taxation Today at Loyola-L.A.

TMAjay Mehrotra (Indiana) & Joseph Thorndike (Tax Analysts) present New Deal Legislation and the Long 20th Century of Progressive Taxation at Loyola-L.A. today as part of its Tax Policy Colloquium Series:

Fiscal policy plays only a minor role in the concept of a New Deal “order” as developed by Steve Fraser and Gary Gerstle. But their essay collection grows out of a broader historiography that minimizes the substantive importance of New Deal taxation, treating the issue as a vehicle for symbolic politics rather than substantive reform. In fact, taxes were a crucial element of the New Deal order — and one of its most powerful and durable legacies.

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September 28, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Altshuler Presents Lessons The U.S. Can Learn From Other Countries’ Territorial Systems Today at McGill

AltshulerRosanne Altshuler (Rutgers) presents Lessons the United States Can Learn from Other Countries’ Territorial Systems for Taxing Income of Multinational Corporations (with Stephen Shay (Harvard) & Eric Toder (Urban Institute)) at McGill today as part of its Spiegel Sohmer Tax Policy Colloquium Series:

The United States has a worldwide system that taxes the dividends its resident multinational corporations receive from their foreign affiliates, while most other countries have territorial systems that exempt these dividends. This report examines the experience of four countries – two with long-standing territorial systems and two that have recently eliminated taxation of repatriated dividends.

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September 28, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Trump's Tax Plan: 'Tax Reform That Will Make America Great Again'

The AALS Needs More Some Political Diversity

AALS (2017)John O. McGinnis (Northwestern), The Association of American Law Schools Needs More Political Diversity:

In the week that a new organization, Heterodox Academy, was established to press for more ideological diversity in academic life, the learned association in my own profession showed how much it is needed. The Association of American Law Schools (AALS) sent around a notice of its prospective annual meeting, highlighting its most prominent speakers. Of the thirteen announced, none is associated predominantly with Republican party, but eleven are associated with the Democratic Party. Many are prominent liberals. None is a conservative or libertarian.

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September 28, 2015 in Legal Education | Permalink | Comments (5)

Dean Performs Heimlich On Provost

Details here.

September 28, 2015 in Legal Education | Permalink | Comments (0)

The IRS Scandal, Day 872

IRS Logo 2RedState:  Is the IRS in Collusion with the Clinton Foundation? Charles Ortel’s Quest to Expose Clinton Foundation Fraud Has a Lois Lerner Connection, by Myra Adams:

Does anyone remember Henry Markopolos? In case you don’t, he was the former securities industry executive who for nine years persistently, but unsuccessfully, tried to convince the U.S Securities and Exchange Commission (SEC) that the respected securities investment firm headed by Bernie Madoff was engaged in massive long-term fraud.

Fast forward to 2009 when Madoff was sentenced to 150 years in prison for operating the largest private Ponzi scheme in history adding up to billions of dollars in client losses.

In 2010, Markopolos wrote about his dramatic whistle-blower experience in a book aptly titled,  “No One Would Listen: A True Financial Thriller.”

So why am I bringing up the heroic efforts of Harry Markopolos?

The answer is a whistle-blower in the mold of Markopolos has come to my attention and his name is Charles Ortel. Like Markopolos, Ortel has a background as a financial industry executive in addition to a successful track record of identifying economic trends and systemic problems within companies, most notably General Electric.

Throughout 2015, Ortel has carefully studied and documented a decade’s worth of domestic and global fraud, theft, corruption and violations of strict IRS rules being perpetrated by a prestigious multi-billion dollar charitable organization known as the Bill, Hillary, and Chelsea Clinton Foundation.

Unlike Markopolos, who went to the SEC and was largely ignored because of incompetence, Ortel believes that the IRS is actively in collusion with the Clinton Foundation.

Collusion with the high-profile charity explains why the IRS is not thoroughly investigating Ortel’s carefully documented allegations of illegal activity on a scale so grand that a major audit would certainly be triggered if the name of the foundation was not “Clinton.”

Only collusion explains why, for over a decade, the IRS has allowed the Clinton Foundation, and all its umbrella organizations with different names to operate outside the strict rules and regulations under which all tax-exempt charities must operate or risk losing their tax-exempt status.

Ortel calculates that 2004 was the year when the foundation began engaging in massive fraud. Now guess who was director of the IRS’s Exempt Organizations Rulings & Agreements Division at that time? And guess who in December of 2005 was promoted to director of the entire IRS Exempt Organizations Division? Does the name Lois Lerner ring a bell?

The now disgraced Ms. Lerner resigned and retired from the IRS in September of 2013. In May of 2014 she refused to testify before a congressional committee. She then invoked the 5th Amendment, and was found in contempt of Congress. Lerner became the name most associated with what is still an ongoing IRS investigation as to why and how her department consistently denied tax-exempt status to conservative groups.

Ortel told RedState that he believes Lerner, a known partisan Democrat, “looked the other way at the IRS, thus allowing the Clinton Foundation’s cancer to spread.”

But even with Lerner long gone, Ortel says “Clinton acolytes are spread throughout the IRS.” Certainly those allegations help answer the question I posed two weeks ago on National Review: “Where are the Clinton Foundation’s Revised IRS 990 Forms?”

Fortunately my piece caught Ortel’s eye and now, after many discussions, I realize that asking why the IRS has yet to crack down on the Clinton Foundation for their delayed 2014 Form 990 along with years of promised revised filings, barely scratches the surface.

With the IRS ignoring Ortel, he is seeking nationally known investigative journalists to help him gain some traction in the mainstream media for his politically charged allegations in hopes that the Clinton Foundation IRS corruption scandal will “go viral.” ...

Finally, the National Journal’s Ron Fournier added some fuel to Ortel’s fire. In a piece demanding that Hillary Clinton either “come clean or get out,” Fournier hearkens back to that famous phrase, “follow the money” attributed to “Deep Throat” in the Watergate scandal when he writes that a Clinton loyalist said to him, “The emails are a related but secondary scandal. Follow the foundation money.”

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September 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

TaxProf Blog Weekend Roundup

Sunday, September 27, 2015

Columbia Memorial Service For Marvin Chirelstein

ChirelsteinColumbia Law School is holding a memorial service this Wednesday for the legendary Marvin Chirelstein, who died on February 16 at the age of 86.  From Dean Gillian Lester:

Please join me to celebrate the life and achievements of our beloved friend and colleague Marvin Chirelstein. The memorial will be held as follows:

Date: Wednesday, September 30, 2015

Time: 6 p.m. Location: Jerome Greene Hall, Room 104

A reception in Drapkin Lounge will immediately follow.

Please email Briana Florio if you plan to attend.

Prior TaxProf Blog coverage:

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September 27, 2015 in Legal Education, Obituaries, Tax, Tax Profs | Permalink | Comments (1)

The Top 5 Tax Paper Downloads

Public Attitudes Towards Prayer, Wealth, Health, And Tax Exemption For Churches

YouGov, 38% of Born Again Christians Believe Prayer Can Boost Your Wealth:

YouGov's research shows that a large majority of Americans (73%) do not believe that wealth is a sign of God's favor. Even most born again Christians (56%) disagree with that belief, though born again Christians (24%) are more than twice as likely as the rest of the country (10%) to believe that God favors the wealthy. ...

18% of Americans believe that prayer can make you wealthier, but born again Christians (38%) are nearly three times as likely as the rest of the population (13%) to believe this. Belief that prayer can improve your health is, however, a much more popular article of faith. 64% of Americans believe in the health benefits of prayer, including 54% of Americans who are not born again Christians.


The American public is split right down the middle on the thorny issue of whether or not religious organizations should be exempt from taxation.

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September 27, 2015 in Tax | Permalink | Comments (3)

The IRS Scandal, Day 871

Saturday, September 26, 2015

This Week's Ten Most Popular TaxProf Blog Posts

IRS Releases Summer 2015 SOI Bulletin

IRS Logo 2The IRS's Statistics of Income Division has released (IR-2015-105) the Summer 2015 SOI Bulletin (Vol. 35, No. 3), with these articles:

September 26, 2015 in IRS News, Tax | Permalink | Comments (0)

Chronicle Of Higher Education: The Law School Co-Deaning Trend

Following up on my previous posts (links below) on the growing practice of law school co-deans:  Chronicle of Higher Education, A Deanship Divided in 2:

Sometimes, it seems, just the right person to fill a top post is two people. The provost of the University of New Mexico concluded as much in August, when he promoted two law professors, Alfred D. Mathewson and Sergio Pareja, to be co-deans of its School of Law. ...

Rather than conduct another national search, the university chose to hire the next dean internally. The new co-deans are both specialists in business and tax law. ...  The two men plan to share external-relations and fund-raising duties during their three-year term. Mr. Pareja will focus more on faculty and curriculum development, while Mr. Mathewson will head the New Mexico Judicial Nominating Commission, a traditional responsibility of the law dean. The co-deans will split between them the customary supplemental administrative compensation of about $60,000 a year.

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September 26, 2015 in Legal Education | Permalink | Comments (1)

The IRS Scandal, Day 870

IRS Logo 2American Thinker, Lois Lerner's 'Partners':

On October 5, the same day the Supreme Court opens its term, across town at the Washington Marriott Georgetown a group of bureaucrats that has lost four times before that court will huddle in a three-day meeting open only one day to the public or the people and entities they regulate.

Unless you are a lawyer representing nonprofit organizations, it’s unlikely you’ve ever heard of NASCO, which is the National Association of State Charity Officials. These are state officials who work together and even collaborate with federal officials to regulate your favorite charities or nonprofit groups advocating for your constitutional rights.

A 2007 letter from NASCO’s then-president Hugh Jones to Lois Lerner describes NASCO as Lerner’s “partner in the regulation of charities.” Especially in retrospect, that’s some admission against interest, as lawyers might say. Lois Lerner, of course, is the now-former IRS official held in contempt of Congress for refusing to testify about how her Tax Exempt Division targeted and abused conservative nonprofit organizations, and illegally disclosed the names and addresses of donors to at least one. ...

It’s not just that NASCO considered itself a partner with “Dr. Evil” Lois Lerner so much as many of its members act like her “Mini-Me.” Lerner’s IRS was caught violating First Amendment rights of conservatives by demanding such things as the prayers they said at their meetings, and illegally disclosing to hostile blogs the confidential list of donors to the National Organization of Marriage.

It is a common unethical practice employed by many NASCO members to, like Lerner, make demands for actions and production of documents, but refusing to cite legal authority, which gives cover to their lawlessness or even incompetence. ...

The theme of NASCO’s meeting in Washington early next month is “A Renewed Focus on the State Regulator.” A renewed focus is indeed needed, but on their lawlessness, instransparency, unethical behavior, and Lois Lerner-like arrogance.

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September 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, September 25, 2015

Weekly Tax Roundup

Weekly Legal Education Roundup

Weekly SSRN Tax Roundup

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September 25, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

Yogi Berra's Tax Wisdom

YogiForbes:  Yogi Berra's Sayings Worked Their Way Into Tax Decisions, by Peter J. Reilly:

Yogi Berra besides being a great baseball player and manager is also known as something of a common man philosopher for his sayings sometimes called Yogi-isms not all of which he actually said. As is my habit when the prominent pass, I had to check whether he had been involved in tax litigation. I didn’t find anything and my Thomson Reuters Checkpoint is pretty comprehensive and my research skills are pretty good. After all, tax blogging is 90% good research; the other three-quarters is creativity.

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September 25, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (2)

Estate of Former Detroit Pistons Owner Sues Deloitt For $500 Million For Botching Tax Plan

PistonsFollowing up on my previous posts:

Bloomberg, Deloitte Sued for $500 Million by Estate of Ex-Pistons Owner:

A Deloitte unit allegedly promised a tax plan under which former Detroit Pistons owner Bill Davidson would “win if he lived, or win if he died.”

It didn’t work out that way. Four years after the 2009 death of the multibillionaire, his estate was hit with a $2.7 billion tax bill, according to a lawsuit filed in New York.

The estate sued Deloitte Tax LLP Thursday to recover $500 million in taxes, fees and penalties from the adviser.

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September 25, 2015 in Tax | Permalink | Comments (0)

Taxpayers Flee Democrat-Run States For Republican Ones

Americans for Tax Reform, Taxpayers Fleeing Democrat-Run States for Republican Ones:

In 2013, more than 200,000 people on net fled states with Democrat governors [led by New York, Illinois, California, Connecticut, and Massachusetts] for ones run by Republicans [led by Texas, Florida, South Carolina, North Carolina, and Arizona], according to an analysis of newly released IRS data by Americans for Tax Reform. 

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September 25, 2015 in Tax, Think Tank Reports | Permalink | Comments (28)

The IRS Scandal, Day 869

IRS Logo 2The Hill:  The IRS's Abuse of Power, by Tom Schatz (President, Citizens Against Government Waste):

During the reign of King George III, Britain's American colonists felt the heavy burden of a monarch imposing his will to levy heavy taxes without representation, overregulate businesses and trample upon basic freedoms. In order to overcome these oppressive bonds, the 13 Colonies banded together to declare their independence from tyranny.

President Obama does not have the same level of power as King George, but he is using every tool at his disposal to emulate the king and restrict the freedom of Americans as they pursue their daily lives and conduct their business. In other words, when Obama famously said in January 2014 that he had a pen and a phone to get things done with or without Congress, he was not joking. His administration has taken unprecedented steps to issue regulations and rulings without going through normal administrative procedures, such as issuing "sub-regulatory guidance" and circumventing Congress whenever possible.

A prime example of this kind of abuse of power was the hiring of outside counsel by the Internal Revenue Service to conduct interviews and assist in an audit of Microsoft on May 19, 2014. In a May 13, 2015 press release regarding his letter to the IRS about this matter, Senate Finance Committee Chairman Orrin Hatch (R-Utah), questioned the legality of such an action because it "1) appears to violate federal law and the express will of the Congress; 2) removes taxpayer protections by allowing the performance of inherently governmental functions by private contractors; and 3) calls into question the IRS's use of its limited resources."

This extraordinary episode should be troubling for all taxpayers. On top of the waste of tax dollars, the hiring of outside litigators at Obama's IRS is the latest overreach by the administration and the same agency that spawned Lois Lerner, the former director of the Exempt Organizations unit.

While there is no excuse or justification for this action by the IRS and no one should be subject to such an misuse of the taxpayers' money, a large company can battle to maintain its rights under the law (albeit at the expense of conducting its ordinary business). It is bad enough when IRS auditors and bean counters come knocking at someone's door, but there is no way that a small business or individual taxpayer could withstand a grilling by high-powered and highly paid litigators. Congress was not around to stop King George, but it can and should stop the Obama administration's ongoing abuses of power.

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September 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, September 24, 2015

NY Times: Is The Bar Too Low To Get Into Law School And Practice Law?

NY Times Room for DebateNew York Times Room for Debate, Is the Bar Too Low to Get Into Law School?:

Bar exam scores have declined over the past few years, and last summer, graduates had some of the lowest scores in a decade. This years scores could be even worse. The National Conference of Bar Examiners, which creates and scores the multistate, multiple-choice portion of the exam, maintains that the quality of incoming law students has declined, while many law professors blame the bar exam itself.

Why are so many law students failing the bar exam?  

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September 24, 2015 in Legal Education | Permalink | Comments (5)

Bird & Zolt: Taxation And Inequality In Canada And The United States

Richard M. Bird (Toronto) & Eric M. Zolt (UCLA), Taxation and Inequality in Canada and the United States: Two Stories or One?, 52 Osgoode Hall L.J. 401 (2015):

Canada and the United States have both experienced a substantial increase in income inequality over the last several decades. In this article, we examine the complex interaction of income inequality with tax and transfer systems in Canada and the United States. We begin by comparing the data on taxation and expenditure to understand the similarities and differences between the two countries. We then consider how changes to tax and transfer policies have affected the levels of inequality in both countries. The article concludes by offering some policy recommendations that each country may consider to address the increasing levels of inequality.

September 24, 2015 in Scholarship, Tax | Permalink | Comments (1)

MBA Applications Soar As Law School Applications Fall To 30-Year Lows

Bloomberg, Business Schools See Broadest Increase in Applications Since the Recession; Meanwhile, The Executive MBA May be Dying:

Traditional business school programs are experiencing the strongest level of interest from U.S. applicants since 2009, a new report shows. Fifty-nine percent of U.S. business schools said applications to full-time, two year MBA programs from Americans increased over last year, as reported in a survey of hundreds of programs conducted by the Graduate Management Admission Council, the body that administers the main business school entrance exam.

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September 24, 2015 in Legal Education | Permalink | Comments (1)